exv10w1







Exhibit 10.1




SUPPLY AGREEMENT




	 	 	 
	BETWEEN:

	 	QUANTRX BIOMEDICAL CORPORATION, a Nevada corporation (“QuantRx”);
	 
	 	 
	AND:

	 	CYTOCORE, INC., a Delaware
corporation (“CytoCore”).
	 
	 	 
	DATED:

	 	May 19, 2008.






R E
C I T A L S:




     A. QuantRx® has developed and/or owns the rights to certain technology relating to
the collection, transfer and use for diagnostics of vaginal fluids, including all biological
materials
contained in same, which QuantRx® has branded “PadKit®”. CytoCore is engaged in the
business of developing and commercializing products for the screening and/or diagnosis of
cancers and other diseases of the female reproductive system.



     B. CytoCore desires to pursue the development of a diagnostic product utilizing
QuantRx’ “PadKit®” technology for specific uses,
and to utilize QuantRx® for manufacturing
of
one or more products employing QuantRx’s “PadKit®” technology, all subject to and on the

terms and conditions set forth below.



A G
R E E M E N T:




     In consideration of the foregoing Recitals, which are by this reference incorporated in this
Development and Supply Agreement (this “Agreement”), and in consideration of the mutual promises,
representations, warranties and covenants set forth below, the parties agree as follows:



     1. DEFINITIONS. When used in this Agreement, the following terms have the meanings set forth
below.



          1.1
“Pad” means the untreated QuantRx PadKit® miniform interlabial pad as specified in
Schedule B (the “Specifications”). Without limiting the other provisions of this Section, the Pad
specifically does not include PadChekTM, where the pad comprises or contains the diagnostic method.




          1.2 “Product” means an assembly or kit as specified in Schedule B comprising one or more Pads
plus one or more ancillary components packaged together.




          1.3
“Technology” means the detection, identification, diagnosis, staging, evaluation and/or
classification of reactive, dysplastic and malignant changes in human cervical,
endometrial, ovarian and other cells as contained in samples collected using and/or recovered from
the Pad.




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          1.3.1 For the purposes of this agreement, the “Technology” shall also include the
ability to use samples collected using or recovered from the Pad with any method for
detecting and identifying or typing Human Papilloma Virus, herein “HPV”.



          1.4 “Data” means descriptive; clinical, scientific; manufacturing and other
information related to the Pad, the Product and the Technology as
described in 1.1 - 1.3 above
that has been, is being, and/or will be collected or developed by QuantRx, including any such
information that is required in order to obtain and/or maintain regulatory approvals.




          1.5 “Distribution Channels” means: (a) sales to physicians; (b) sales to
hospitals for their own use on their premises; (c) sales to laboratories; and (d) sales to
distributors
for use in (a) and (b) above.




          1.6 “Territory” means all countries of the world.




     2. LICENSE
FEES. CytoCore agrees to pay the following fees to QuantRx:



          2.1 Upon mutual execution of this Agreement, CytoCore will pay to QuantRx
a fully earned, nonrefundable license fee for use of the Data of $100,000.00 (the “License
Fee”).
CytoCore shall additionally pay to QuantRx a milestone payment of $50,000 upon or before
Regulatory approval of the first CytoCore product utilizing the Technology; and a milestone
payment of $50,000 upon or before the sale of $1,000,000 of CytoCore products which utilize
the Technology. In addition, CytoCore will pay to QuantRx a fee of $5,556 per month for
eighteen (18) months, starting the 1st day of the month following the Effective
date provided that
this Agreement is not previously terminated by either Party. CytoCore reserves the right to
prepay without penalty any amounts due QuantRx under this Section.




          2.2 CytoCore shall purchase such number of units of Product per year as set
forth in Section 7, at such prices as are set forth on Schedule D.




          2.3 All fees payable pursuant to this Section 2 shall be made by wire transfer,
cashier’s check or other good funds payment. Any undisputed fee not paid within five days of
its
due date shall bear interest at 12.0% per annum from its due date
until paid in full.




          2.4 In the event any undisputed fee payable pursuant to this Section 2 is not
paid within 10 days after written demand from QuantRx for payment, including any accrued
interest thereon, QuantRx may terminate this Agreement with respect to the items attributable
to
the unpaid portion. In such event, the rights and duties of the parties shall be as set
forth in
Section 18 below, except that any fully paid license shall survive termination or expiration
for
any reason.



3.0 GRANT. QuantRx grants to CytoCore an exclusive right to use, market, sell, have sold, and
distribute the Product and Technology in the Distribution Channels in the Territory, whether
directly or contractually through independent agents or distributors. The foregoing Grant and
rights are subject to all terms and conditions set forth in this
Agreement. The Grant does not act
to relinquish QuantRx’ rights to the Technology nor to the Product in other Distribution Channels
and does not grant, by implication or otherwise, any other rights to CytoCore of any other
technologies owned, invented or discovered by QuantRx, whether past, present or future. Upon




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payment of the license fees set forth above, QuantRx further grants to CytoCore a perpetual,
irrevocable worldwide right and license to use the Data as needed, at CytoCore’s discretion, to
obtain regulatory approval for marketing CytoCore’s products and
services.



CytoCore
shall have the right to sub-license portions or all of its rights under this Agreement
in those countries where CytoCore’s ability to enter the market directly is limited or precluded
by local content and/or local ownership laws and/or regulations
assign to the JV.



4.0
REGULATORY CLEARANCE. CytoCore shall be solely responsible,
during the term of this Agreement
for pursuing, obtaining and maintaining each regulatory clearance required for CytoCore’s
sale of the Products to be distributed and sold in the Distribution Channels within the Territory,
and for fulfilling the obligations as the holder of such clearances.





	4.1	 	Without limiting the foregoing, CytoCore shall be responsible for the payment of
all costs and expenses for all submissions and clinical trials required to obtain such
clearance, except that CytoCore may use Data as set forth above. CytoCore shall also be
responsible for compliance with the medical device reporting (“MDR”) requirements of the
FDA, as specified in 21 CFR Part 803 and foreign counterparts thereto, and corrections or
removal requirements, as specified in 21 CFR Part 806 and foreign counterparts thereto, and
to notify QuantRx of all MDR and corrections or removal filings. CytoCore agrees to
immediately notify QuantRx in writing of recalls, and corrections or removal actions.




5.
SUPPLY OBLIGATIONS. During the term of this Agreement and provided the Products remain
compliant with the Specifications therefore and subject to permitted terminations as set forth in
Section 14.4, CytoCore shall only purchase Products from QuantRx and no others.





	5.1	 	During the term of this Agreement, QuantRx will exclusively manufacture and supply to
CytoCore such quantities of the Products as CytoCore shall require from time to time
in accordance with this Agreement.






	5.1.1	 	Notwithstanding the foregoing, if QuantRx or its designee is unable to supply the
quantities of Product required by CytoCore or if within a market the ability of QuantRx or
its designee to supply Product or Product components is restricted or precluded by law or
regulation, CytoCore shall be granted a license to have made and sell Product, and to
procure Product or components thereof from suitable parties other than QuantRx, provided
that CytoCore pays QuantRx for such  right a royalty of 8% of the price, net of
shipping, taxes, and duties paid to such a party for Pads.
	 
	5.2	 	No QuantRx Right to Distribute and Market. No right to market, sell or distribute
any Product, as defined herein, in any Distribution Channel is granted by CytoCore to
QuantRx under this Agreement. Additionally, QuantRx has no right to the use of CytoCore
trademarks, copyrights or similar property, except as required and approved by CytoCore for
the marking of packages and other manufacturing operations, intended for the exclusive use
by CytoCore. QuantRx will mark the Products, packaging and packaging inserts with patent
markings appropriate to reflect the Patents and as otherwise directed
by CytoCore.






	5.3	 	Shipping. CytoCore will issue Purchase Orders for the Products to QuantRx, and
QuantRx will ship such orders to CytoCore or to such location or recipient as directed by
CytoCore





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	 	 	after receipt of the order from CytoCore, and in accordance with shipping instructions on
purchase orders received by QuantRx from CytoCore. Shipping and handling charges will be
charged on the invoices, or be collect to CytoCore as agreed upon by the Parties. Shipping
times will be mutually and reasonably agreed upon by the Parties, and based on the size of the
order and type of shipping. Notwithstanding the foregoing, all orders will be shipped within
60 days of receipt of purchase order, unless otherwise agreed.
	 
	5.4	 	Regulatory. QuantRx shall be solely responsible, during the term of this Agreement
and
prior to its first commercial order for Product from QuantRx, to pursue, obtain and
maintain
all records, filings, approvals, and materials necessary to comply with manufacturing the
Product in full compliance with US FDA, European EC, and other agency
requirements.
without limiting the foregoing, QuantRx shall maintain current establishment
registration
and device listings, as specified in 21 CFR Part 807 and as required by the country in which
manufacture of Product is performed.
	 
	5.5	 	Samples. QuantRx shall supply to CytoCore such amounts of product samples as mutually
agreed to be necessary to generate customers or potential customers for the Products and for
the purpose of clinical trials of Product at a price equal to its direct cost plus 35%.
	 
	5.6	 	Force Majeure. QuantRx will use its best efforts to
fill accepted orders as
promptly as
practicable, subject to unanticipated delays caused by governmental orders, actions or
requirements, transportation conditions, inclement weather, labor or material shortage,
strike, riot, terrorist act, fire, natural disaster or other cause beyond QuantRx’ control. In
all
cases, QuantRx will use its best efforts to advise CytoCore in advance of any inability to
make full and timely delivery of Products to CytoCore. Each party shall not be liable for
failure to perform hereunder due to governmental orders, actions or requirements,
transportation conditions, inclement weather, labor or material
shortage, strike, riot,
terrorist
act, fire, natural disaster or other causes beyond such non-performing party’s reasonable
control.
	 
	5.7	 	Forecasting. CytoCore will provide to QuantRx every month a written nonbinding 3-month
rolling forecast of CytoCore’s proposed requirements for the Products, including Product
samples by SKU. QuantRx agrees to maintain the capacity to supply up to 15.0% over such
monthly forecast.
	 
	5.8	 	Failure of Supply. If QuantRx is unable to timely supply ordered Product within 10
days
after request to cure same from CytoCore, then CytoCore may pursue manufacturing of the
Product by a qualified third party. However all other terms and conditions of this Agreement
will remain in effect.
	 
	6.0	 	MINIMUM QUANTITIES.
	 
	6.1	 	Amounts. CytoCore agrees to purchase from QuantRx the following minimum quantities of
Product in each of the following annual periods, beginning with the date of first commercial
order. Quantities will be determined after unit pricing has been agreed to. CytoCore Inc.
agrees to purchase a minimum of $25,000 the first year rising $15,000 each subsequent
year to $40,000 year 2, $65,000 year 3, $80,000 year 4 and $95,000 year 5.





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	 	 	The parties will negotiate in good faith commercially reasonable amounts for subsequent annual
periods and years. Any excess purchases above the agreed minimum in one annual period
shall not be carried over to the following annual period. In the event the parties cannot agree
on minimum volumes after the third annual period, such disagreement shall be legitimate
basis for termination without cause of this Agreement by one party under Section 18 below, upon
not fewer than 90 days’ prior written notice.
	 
	6.2	 	Cure by CytoCore. In the event that at the end of any annual period, CytoCore has
not met the agreed minimum purchase requirement for such period, CytoCore shall,
within 45 days after the end of such annual period, in its sole discretion, either (a) pay
the difference between the units actually purchased and the minimum purchase requirement; or
(b) purchase such additional units in order to meet the minimum purchase requirement for such
prior period.
	 
	7.0	 	MANUFACTURING.
	 
	7.1	 	Manufacturing Obligations. QuantRx shall manufacture the Products in compliance with
the
Specifications, which may be changed by prior written agreement of the parties, and in
compliance with Quality System Regulation (“QSR”) requirements set forth in 21 CFR Part 820
and in conformance with the requirements of ISO 13485.
	 
	7.2	 	Quality Control. QuantRx shall, at its cost, perform all quality control tests
required by
regulatory authorities and reasonably required by CytoCore. In addition, prior to the
shipment of each order to CytoCore, for each manufacturing lot included in said shipment,
QuantRx shall deliver to CytoCore lot qualification samples in accordance with a mutually
agreed upon sampling plan. CytoCore shall perform acceptance testing on such samples
from each lot and shall in a timely manner notify QuantRx whether each lot satisfies the
mutually agreed upon acceptance criteria. Acceptance of a manufacturing lot of Product by
CytoCore constitutes approval for QuantRx to ship the balance of said lot to CytoCore in
accordance with Section 5.3 above. Lot qualification samples will not be considered to be
part of the Amounts listed in Section 7.1 above.
	 
	7.3	 	Changes to Product. QuantRx shall notify CytoCore in writing at least 90 days prior to any
proposed changes in its manufacturing procedures, materials, equipment or processes which
affect Product design, form or  function. As and to the extent reasonably agreed in writing by
the parties and as permitted by applicable law. QuantRx may change a Product and any
Specifications related to it. QuantRx agrees that no such changes will cause CytoCore to lose
regulatory approvals for the Products, and shall pay the cost of any resubmissions to
regulatory agencies required as a result of such changes.
	 
	7.4	 	Non-Conformity and Defective Products. If CytoCore notifies QuantRx that any Products
supplied by QuantRx do not conform to the Specifications or are otherwise defective (including
notification of why CytoCore believes the Products to be defective), then QuantRx shall, at
its cost, replace such defective quantity of the Products and at QuantRx’ cost ship the
replacement Products as reasonably directed by CytoCore to CytoCore or CytoCore’s customer at
the location of such defective quantity of the Products, to be shipped within 30 working days
after the receipt of the defective Product. QuantRx shall





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	 	 	keep and maintain adequate records of all quality control testing, instrumentation validation
and stability studies and, upon CytoCore’s reasonable request, shall provide CytoCore with
access to such records and the results of any testing. At its sole discretion and cost,
QuantRx may instruct CytoCore to return some or all of the non-conforming and/or defective
Product to QuantRx or to destroy such product.
	 
	7.5	 	Recalls, Corrections and Removals. QuantRx and CytoCore agree that if either party
should
discover or become aware of any fact, condition, circumstance or event (whether actual or
potential) concerning or related to the Products which may reasonably require recall,
correction or removal, such party shall promptly communicate such fact, condition,
circumstance or event to the other party within 24 hours. In the event any governmental entity
or regulatory body requests that a Product be recalled, or the parties agree, after
consultation with each other, that a Product should be recalled or removed, the parties shall
take all appropriate remedial actions with respect to such recall or withdrawal of the
Product.
	 
	7.6	 	Audit. CytoCore reserves the right to audit QuantRx’ (and its subcontractors’ and
designees’) facilities, at CytoCore’s sole expense, as
reasonably necessary to verify
compliance by QuantRx with the terms and conditions of this Agreement. Exercise by
CytoCore of such right shall be subject to the following conditions: (a) with good cause (for
example, QuantRx’ failure to remedy problems) as needed to verify that the cause has
been
successfully resolved in accordance with all applicable regulatory requirements; (b) without
good cause shown, CytoCore shall be entitled to conduct up to two audits per 12-month
period; (c) CytoCore audits shall be conducted only after at least five days’ advance written
notice of the audit is provided by CytoCore to QuantRx; and (d) all information gathered
and data reviewed during any such audit shall be “Confidential Information” subject to the
provisions of Section 16 below. QuantRx shall at all times maintain complete and
accurate
books and records pertaining to performance of its manufacturing and other obligations set
forth in this Agreement. QuantRx shall provide commercially reasonable cooperation to
CytoCore in the performance of audits by or on behalf of CytoCore, including without
limitation, providing reasonable access to documents relevant to the manufacture of
Products sold to CytoCore, subject to the provisions of Section 16.




8.
CUSTOMER SERVICE AND COMPLAINTS. CytoCore shall, at its cost, furnish all technical service,
assistance and support required by its customers or users of the Products and
arising out of sales of Products made by or on behalf of CytoCore. CytoCore will provide
QuantRx with copies of all inquiries, complaints and requests pertaining to the Products in a
timely manner. QuantRx shall be solely responsible for investigation of any Product complaints,
such investigations being carried out in accordance with the requirements of 21CFR820 and the
results of such investigations being provided to CytoCore in a timely manner.



9.
LIMITED WARRANTY OF MANUFACTURER. CytoCore’s sole remedies for defective
Products are set forth in Section 7.4 above. Except as expressly provided above, Manufacturer
shall not be liable for any damages, costs, expenses or claims (whether based on contract, tort or
otherwise), or for breach of any warranty, express or implied, or for any other obligation or
liability on account of the Products covered by this Agreement, including special, punitive or
consequential damages, even if advised of the possibility thereof. EXCEPT AS REQUIRED BY




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APPLICABLE LAW, AND EXCEPT AS EXPRESSLY PROVIDED ABOVE, QUANTRX DISCLAIMS ALL WARRANTIES WITH
RESPECT TO THE PRODUCTS, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND OF
FITNESS FOR A PARTICULAR PURPOSE.




10. PACKAGING.





	10.1	 	Packaging. CytoCore will procure and provide to QuantRx, all required artwork, in
any or
all appropriate languages, for bulk or individual unit packaging, labeling and package
insertions (collectively, “Packaging”) to be used by QuantRx for the Products to be shipped
to CytoCore. CytoCore shall also provide any necessary EAN codes. All Products shall be
packaged in lots as set forth in the Specifications. All Packaging shall include the brand
name of the Product as designated by CytoCore.
	 
	10.2	 	Packaging Ownership Rights. CytoCore is and shall be the copyright owner or licensee
of
all designs and artwork used in connection with packaging for the Product. To the extent
third-party trademarks or other rights are necessary for certain customers, CytoCore
represents that it has or will have obtained the right from such third parties for CytoCore the
right to use such trademarks or other rights solely for such purpose.
	 
	10.3	 	Product Inserts. All Product Inserts must be pre-approved by CytoCore and be in
full
compliance with all labeling laws in each jurisdiction in which Products are distributed.
	 
	10.4	 	Advertising. All advertising and contents thereof shall the sole responsibility of
CytoCore.





11. PRODUCT PRICING AND PAYMENT.





	11.1	 	Purchase Price. QuantRx shall charge CytoCore, and CytoCore shall pay for the
quantities
of Product delivered by QuantRx pursuant to this Agreement, at the purchase prices set forth
in the attached Schedule C to be completed in good faith and initialed by the parties. If the
parties are unable to agree on the purchase prices (each, a “Purchase Price”) by the date of
receipt by CytoCore of the 510k clearance for the Product to be manufactured by QuantRx,
then the provisions of Section 19.3 below shall be utilized by the parties to establish same,
with all costs and expenses to be borne 50/50 by QuantRx and CytoCore. Each Purchase
Price is and shall be CIF/POE. Duties, fees, and local transportation shall the responsibility
of CytoCore.
	 
	11.2	 	Price Adjustment. No adjustment in a Purchase Price shall be permitted during the initial
annual period following CytoCore’s first order. Thereafter, but not more than once during
any calendar year. QuantRx may adjust a Purchase Price according to the formula provided
in Schedule C (QuantRx direct cost plus 35%, direct costs being verifiable by audit) upon at
least 90 days’ advance written notice to CytoCore. Adjusted Purchase Prices shall apply to
Product orders quoted by CytoCore after the effective date of said notice. In no event shall
any annual increase in the Purchase Price exceed the previous year’s Purchase Price by
greater than 10.0%, unless approved, in writing, by both parties hereto. QuantRx shall use
best efforts to achieve price reductions each year through volume discounts and
manufacturing efficiencies 11.3 Payment. CytoCore agrees to pay each undisputed
invoice
of QuantRx within 30 days after CytoCore’s receipt of the Products that are the subject of





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	 	 	the invoice. If CytoCore reasonably disputes any invoice for good cause and in good faith,
CytoCore will notify QuantRx within 10 days of invoice receipt, stating the specific reason(s)
for the dispute.
	 
	11.4	 	Late Payment. Unpaid amounts will bear interest at 12.0% per annum from the due date
until paid in full, calculated
on a non-compounding daily basis, in addition to
QuantRx’ other rights and remedies set forth in Section 18 below.
	 
	11.5	 	Title; Risk of Loss. Title to ordered Products will
pass to CytoCore upon the later
of tender of delivery or payment. Risk of loss will pass to CytoCore upon tender of delivery.





12. INTELLECTUAL PROPERTY. QuantRx will retain full ownership of the Intellectual
Property which underlies the Technology and Product(s).




13. TERM AND TERMINATION.





	13.1	 	This Agreement shall become effective when fully executed by both parties and the License
Fee is paid. This Agreement shall have an initial term of five years (beginning on its
execution), with automatic renewals of five years each, unless (a) terminated by either party,
(b) one party gives notice of termination at least 90 days prior to the end of the initial
or any
renewal term, or (c) terminated as set forth below.






	13.2	 	CytoCore may terminate this agreement by providing thirty (30) day advance written
notification of such termination to QuantRx at any time within 18 months of the effective
date or providing ninety (90) day advance written notice thereafter. In the event of such
termination, CytoCore shall be responsible for the payment of any milestone payments
and/or fees earned by QuantRx prior to the termination date and for payment for any
Product ordered, but not yet paid for, during this period.
	 
	13.3	 	QuantRx may either terminate this agreement 24 months from the Execution Date, or
accept $100,000 to delay this option for an additional
12 months, should CytoCore not achieve the milestones found in
Section 2.1 herein.






	 	13.3.1	 	Should the milestones shown in 2.1 herein not be met within 36 months from the
Execution Date hereon, the agreement shall be deemed to be terminated.






	13.4	 	CytoCore may terminate this Agreement for cause upon notice and failure to cure within 10
days of notice under the following conditions:






	 	13.4.1	 	Defective Products are received more than twice in any year
	 
	 	13.4.2	 	QuantRx fails to timely supply Products in the amounts ordered by CytoCore; or
	 
	 	13.4.3	 	QuantRx’s supply of the Products are enjoined by reason of alleged infringement or
found to be infringing and a non-infringing substitute is not timely provided.






	13.5	 	Termination of this Agreement for any reason by either party shall not relieve the parties of
any obligations accrued prior to the effective date of the
termination.





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	13.6	 	If a party should fail to perform  under this Agreement or should violate any term of this
Agreement, then the other party may give written notice of the default and, if the defaulting
party fails to fully correct the default within 60 days, then the other party shall have the right
to terminate this Agreement
	 
	13.7	 	Upon termination of this Agreement:






     (a) All rights, licenses and privileges granted to CytoCore under this Agreement shall
immediately cease and terminate, but any such termination will not affect the rights and
obligations of the parties respecting remedies for breach of this Agreement;




     (b) All obligations arising out of events prior to the effective termination date,
including without limitation orders previously accepted and obligations to pay for delivered
Products, shall be performed in accordance with the terms and conditions of this Agreement;





     (c) If terminated by QuantRx, CytoCore shall have the right to fulfill any contract
obligations for the sale of Products that it may have upon its books when termination notice
was received by CytoCore. If, at the time of termination, CytoCore does not have sufficient
Product in inventory to meet these contract obligations, QuantRx shall supply CytoCore with
sufficient product to meet these obligations under the then existing terms and
conditions. In addition, CytoCore has the right to sell unsold Product in its inventory for a
period of six months after termination; and





     (d) All sublicenses shall also be terminated by CytoCore unless otherwise extended by
QuantRx.



14. INDEMNITY AND LIMITATION OF LIABILITY.





	14.1	 	Indemnification by CytoCore.
 CytoCore shall indemnify, defend
and hold QuantRx and its Affiliates and
the officers, directors, employees,
agents and independent contractors of
each
of them harmless from and against any and all claims, demands, actions, suits, losses, damages,
liabilities, settlement amounts, costs or expenses (including reasonable attorneys’ fees and
costs) (collectively, “Claims”) arising out of or relating to: (a) CytoCore’s breach of this
Agreement; or (b) CytoCore’s gross negligence or willful misconduct or (c) any products
liability claims relating to CytoCore products excluding the Products provided by QuantRx
hereunder.






	14.2	 	Indemnification by QuantRx. QuantRx shall indemnify, defend and hold CytoCore,
its
Affiliates and the officers, directors, employees, agents and independent contractors of each
of them harmless from and against any and all Claims arising out of or relating to: (a)
QuantRx’ breach of this Agreement; or (b) QuantRx’ gross negligence or willful
misconduct; or (c) any products liability claims relating to use the Products.
	 
	14.3	 	Indemnification Procedure. The party seeking
indemnification (the “Indemnified Party”)
will give prompt written notice of any Claim of which the Indemnified Party is aware to the
other party (the “Indemnifying Party”); provided, however, that the failure by an
Indemnified Party to give such notice will not relieve the Indemnifying Party of its





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		 	obligations under this Section 15, except to the extent that the failure results in the
failure of actual notice and the Indemnifying Party is damaged as a result. The Indemnified
Party will allow the Indemnifying Party to direct the defense and settlement of any such Claim,
with counsel of the Indemnifying Party’s choosing, and will provide the Indemnifying Party, at
the Indemnifying Party’s expense, with information and assistance reasonably necessary for the
defense and settlement of the Claim. In the event that the
Indemnifying Party fails to assume
the defense or settlement of any such Claim within 30 days after receipt of notice of same from
the Indemnified Party, the Indemnified Party shall have the right to undertake the defense,
appeal or settlement of such Claim at the expense of and for the account of the Indemnifying
Party. An Indemnifying Party will not be liable for any settlement of a Claim affected without
its reasonable written consent, nor will an Indemnifying Party settle any such Claim without
the reasonable written consent of the Indemnified Party. No Indemnifying Party will consent to
the entry of any judgment or enter into any settlement that does not include as an
unconditional term the giving by the claimant or plaintiff to the Indemnified Party a release
from all liability with respect to the Claim.






	14.4	 	Limitation of Liability. EXCEPT AS RELATED TO INDEMNIFICATION OBLIGATIONS HEREUNDER,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL,
INCIDENTAL, INDIRECT, SPECIAL,
EXEMPLARY, OR PUNITIVE DAMAGES. EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.





15.0 REPRESENTATIONS AND WARRANTIES.





	15.1	 	No Conflicts. Each of QuantRx and CytoCore represents and warrants to the other that
it is
not a party to any agreement or covenant with any other person, and knows of no statute,
law, ordinance, regulations, rule, order or decree of a governmental authority, which
prohibits or restricts it from entering into and performing pursuant
to this Agreement.






	15.2	 	Compliance with Law. QuantRx and CytoCore each represents and warrants that it is,
and
will remain, in compliance with all applicable international, federal, provincial, state and
local laws, regulations and orders related to its respective business and duties under
this
Agreement. QuantRx specifically represents and warrants that the Product shall, as of
the
date of shipment to CytoCore or its customers, not be adulterated or misbranded within the
meaning of the U.S. Food, Drug, and Cosmetic Act, and any similar provisions of state and
local laws, regulations and orders, and shall comply with GMP requirements for such
products including but not limited to ISO 13485 and foreign equivalents. CytoCore
specifically represents and warrants that it will maintain the 510(k) clearance(s) for
the
manufacture of the Products from the FDA, including for any Product modification
requiring 510(k) clearance, and shall maintain such rights throughout the term of this
Agreement.






	15.3	 	Authorization – OuantRx. QuantRx represents and warrants that: (a) QuantRx has the
right to enter into this Agreement; (b) all necessary actions, corporate and otherwise, have
been taken to authorize QuantRx’ execution and delivery of this Agreement and the same is the
valid and binding obligation of QuantRx; (c) all licenses, consents and approvals necessary
for QuantRx to cany out all of the transactions contemplated in this Agreement have been





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		 	obtained and (d) QuantRx has the experience and technical and physical capacity to
fulfill its obligations under this Agreement.






	15.4	 	Authorization – CytoCore. CytoCore represents and warrants that: (a)
CytoCore has the
right to enter into this Agreement; (b) all necessary actions, corporate and otherwise, have
been taken to authorize CytoCore’s execution and delivery of this Agreement and the same
is the valid and binding obligation of CytoCore; (c) all licenses, consents and approvals
necessary for CytoCore to carry out all of the transactions contemplated in this Agreement
have been obtained; and (d) CytoCore has the experience and technical and physical
capacity to fulfill its obligations under this Agreement.
	 
	15.5	 	QuantRx represents and warrants that the Products will comply to the specifications
therefore and that such Products do not infringe any proprietary right of any third
party.






	15.6	 	Insurance. Each party shall, during the term of this Agreement, at its sole cost and
expense,
obtain and keep in force a policy of comprehensive general liability insurance with bodily
injury, death and property damage limits of at least $2,000,000 per occurrence and $2,000,000
aggregate, including product liability coverage. On execution of this Agreement, and on each
anniversary of same, each party shall furnish a certificate of insurance, in form reasonably
acceptable to the other party, evidencing such insurance and providing for 30 days’ prior
written notice to the other party of any cancellation, nonrenewal or change of such insurance
coverage.





16. CONFIDENTIALITY.





	16.1	 	Confidential Information. The term “Confidential Information” means: (a) the terms
and conditions of this Agreement; and (b) a party’s information, data, knowledge and know-how
(in whatever form and however communicated) relating directly or indirectly to the disclosing
party (or to its Affiliates or contractors), as to its or their respective businesses,
employees, operations, methods, processes, trade secrets, plans, properties, products,
markets or financial positions) that is delivered or disclosed by such party, its Affiliate
or any of their respective officers, directors, partners, members, employees, contractors,
agents or shareholders to the other party in writing, electronically, orally or through
visual means, or that such party learns or obtains aurally, through observation or analyses,
interpretations, compilations, studies or evaluations of such information, data, knowledge or
know-how, and (c) any information that would be reasonably deemed to be confidential when
considering the nature of such information and the circumstances surrounding its disclosure.
Without limiting the foregoing, CytoCore acknowledges and agrees that the proprietary
information
and technology comprising the components, design and makeup of the Products are
proprietary and trade secrets of  QuantRx and constitute Confidential
Information.
Without limiting the foregoing, QuantRx acknowledges and agrees that all information submitted
by CytoCore in support of regulatory approvals, excluding such Data as are licensed
hereunder, are the Confidential Information of CytoCore. Each party will limit access to
Confidential Information to only those of its employees, agents and consultants having a
need-to-know in connection with this Agreement and will take reasonable steps to ensure no
unauthorized person has access to the Confidential Information. Each party will advise in
writing its employees, agents and consultants to whom disclosure of Confidential Information
is made





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– SUPPLY AGREEMENT




 









 









		 	of the obligations under this Agreement to protect the Confidential Information. Each
party will be liable for the unauthorized disclosure of Confidential Information by
its employees, agents and consultants.






	16.2	 	Loss of Status. Confidential Information shall not include information,
data, knowledge
and know-how that, as shown by written records: (a) is known to the receiving
party prior to
disclosure to or receipt by such party without breach of an obligation of
confidentiality; (b)
is in the public domain prior to disclosure to a party; (c) enters the public domain
through no
violation of this Agreement after disclosure to such party; or (d) is independently
developed
by a party without reliance in any way on Confidential Information.
	 
	16.3	 	Use and Disclosure. Each party shall keep the Confidential Information
communicated to it
by the other party confidential and shall not either itself use or disclose such
information or
provisions to any third person without the prior written approval of the other party
in each
instance, except that either party may disclose such provisions to the extent required
by law
or other demand under lawful process, provided the receiving party gives the
disclosing
party prompt notice prior to such disclosure to allow the disclosing party to make a
reasonable effort to obtain a protective order or otherwise protect the
confidentiality of such
information. Subject to the requirements of applicable securities laws and
regulations of
applicable stock exchanges, neither CytoCore nor QuantRx shall make any news releases
or
any other public disclosure with respect to the transactions contemplated by this
Agreement
without the prior written consent of the other party, which consent may be withheld
by such
other party in its sole discretion; provided, however, that the foregoing shall not
prohibit the
disclosure of this Agreement, subject to customary written confidentiality
restrictions, to
persons with whom either party intends to enter into a sale, merger, capital raising
or other
similar strategic transaction.






	16.4	 	Injunction. Either party aggrieved by breach or threatened breach of this
Section 21 shall be
entitled to bring an action to prevent, stop or otherwise obtain redress, including
specific
performance, injunctive relief or other available equitable remedy, without having to
post
bond or other undertaking therefor, and without necessity of providing 60 days’ notice
pursuant to Section 17.3 above.





17. SUBCONTRACTING AND ASSIGNMENT.





	17.1	 	Assignment. Except as provided in this Agreement, CytoCore may not
assign or transfer
this Agreement or any rights or duties under it, voluntarily or by operation of law,
without
the prior written consent of QuantRx. Any attempted assignment or transfer not in
compliance with this Agreement shall be void and of no force or effect. A
reorganization or
merger with another corporation or other person shall not itself, however, constitute
a
prohibited assignment.






	17.2	 	Sale or Sale of Division. Notwithstanding Section 17.1 above,
either party hereto may sell
and transfer its entire rights and obligations under this Agreement to a third person
at any
time without prior written consent of the other Party.





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– SUPPLY AGREEMENT





 











 






	17.3	 	Subcontracting. Either Party may subcontract its obligations hereunder provided that each
Party is responsible for the actions of its subcontractors.




18. NOTICES. Any notice, under this Agreement shall be in writing and be deemed given upon written
receipt of delivery, delivered via overnight courier in each case addressed to the following
addresses:




	 	 	 	 	 
	 

	 	If to QuantRx:
	 	QuantRx Biomedical Corporation
	 

	 	 	 	Attn: CFO
	 

	 	 	 	100 South Main Street, Ste. 300
	 

	 	 	 	Doylestown, PA 18901
	 

	 	 	 	Fax (267) 880-1596
	 
	 	 	 	 
	 

	 	If to CytoCore:
	 	CytoCore, Inc.
	 

	 	 	 	Attn: legal counsel
	 

	 	 	 	414 North Orleans St., Ste. 510
	 

	 	 	 	Chicago, IL 60610
	 

	 	 	 	Fax (312) 222-9580





or to such other address as a party may provide by notice given in the same manner.




19. MISCELLANEOUS.





	19.1	 	Definition of Affiliate. The term “Affiliate” means any person controlled by, under
common control with or which controls a party to this Agreement, control being defined as
either having ownership of a majority of the equity of such party generally eligible to elect a
majority of the governing body of such party, or the right by agreement or otherwise to
direct the actions of such party (including, without limitation as a general partner of a
partnership or as a managing member of a limited liability company).
	 
	19.2	 	Applicable Law. This Agreement shall be governed by and construed in accordance with
the laws and decisions of the state of Deleware, without regard to the conflicts of law rules
of such state.
	 
	19.3	 	Mediation. In the event of a dispute between the parties, which cannot be resolved
in the
course of ordinary business, either party may submit a written request for a meeting of senior
executives to resolve such dispute. In the event that such a request is submitted, the
receiving
party shall make a senior executive available to discuss the matter within 10 business days.
If
the matter is not resolved by such meeting, either party may send a written request that the
dispute be submitted to mediation. Such request shall include the names of at least three U.S.
based mediators or mediation services, each of which must have appropriate professional
training and experience in business mediation. The parties shall work in good faith to
agree on
a mediator within five business days of receipt of the request, and the mediation shall be
scheduled as soon as reasonably practicable, but in any case within 30 days of receipt of the
request. The mediation shall occur in the principal office city of the request recipient. All
costs of mediation shall be borne equally by the parties. In the event that a mutually
agreeable
resolution cannot be reached through mediation, either party may proceed to use the courts or
other legal methods to achieve resolution. Nothing in this Section 19.3 shall be construed as





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	 	 	preventing either party from using the courts directly and immediately for injunctive
relief pursuant to Section 16 in the event that imminent harm is threatened, or as preventing
either party from proceeding to litigation in the event that mediation is unsuccessful.
	 
	19.4	 	Further Assurance. Each party shall execute and deliver, at the request of the
other party, such further documents or instruments, and shall perform
such further acts, that
may be reasonably required to fully accomplish the intent of this Agreement.
	 
	19.5	 	Waiver of Breach. The waiver by either party of a breach of any term or provision of
this
Agreement shall not be construed as a waiver of any subsequent breach of the same or any
other term or provision by either party.
	 
	19.6	 	Modification. This Agreement may not be amended or modified except in a writing
executed by the parties.
	 
	19.7	 	Assignment. This Agreement shall be binding upon and operate to the benefit of the
parties
and their successors and permitted assigns.
	 
	19.8	 	Relationship of Parties. The relationship of the parties under this Agreement is that of
independent contractors. Nothing contained in this Agreement is intended or is to be
construed so as to constitute the parties as partners or joint venturers, or either party as an
agent or employee of the other. Neither party has any express or implied right under this
Agreement to assume or create any obligation on behalf of or in the name of the other, or to
bind the other party to any contract, agreement or undertaking with any third party, and no
conduct of the parties shall be deemed to infer such right.
	 
	19.9	 	Severability. If any provision of this Agreement is finally held to be invalid, illegal or
unenforceable by a court or agency of competent jurisdiction, that provision shall be
severed or shall be modified by the parties so as to be legally enforceable (and to the extent
modified, it shall be modified so as to reflect, to the extent possible, the intent of the
parties), and the validity, legality and enforceability of the remaining provisions shall not
be affected or impaired in any way.
	 
	19.10	 	Interpretation. Time is of the essence of this Agreement in all particulars. All monetary
figures are in U.S. Dollars. The term “days” means calendar
days. As the context may
require in this Agreement, the use of any gender (male, female or neuter) shall include any
other gender, and the singular shall include the plural and the plural the singular. The word
“person” includes individual, joint venture, partnership, limited liability company,
corporation, association, trust or any other entity or organization. The captions heading the
sections and subsections of this Agreement are inserted for convenience of reference only,
and are not to be used to define, limit or describe the scope or Intent of any term, provision,
section or subsection of this Agreement. Each Schedule described in and attached to this
Agreement is incorporated in it. This Agreement may be executed in several counterparts,
each of which shall be deemed an original but all of which taken together shall constitute
one and the same instrument.
	 
	20.11	 	Integration. THIS AGREEMENT CONTAINS THE FINAL AND CONCLUSIVE
AGREEMENT AND UNDERSTANDING OF THE PARTIES WITH RESPECT TO





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– SUPPLY AGREEMENT




 









 









THE SUBJECT MATTER OF IT, AND SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS AGREEMENTS,
PROMISES, REPRESENTATIONS, AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN, BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, including without
limitation any Heads of Agreement.


EXECUTED
by the parties through their duly authorized representatives as of the date first
written above.




	 	 	 	 	 	 	 	 	 	 	 
	QUANTRX BIOMEDICAL CORPORATION	 	 	 	CYTOCORE, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ William H. Fleming
 

	 	 	 	By
	 	/s/ Robert F. McCullough Jr.
 

	 	 
	 

	 	William H. Fleming, Ph. D., CSO
	 	 	 	 	 	Robert F. McCullough Jr., CEO	 	 
	 
	 

	 	QUANTRX
	 	 	 	 	 	5/14/08               CYTOCORE	 	 






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Schedule A
— DATA



Data includes all data from all clinical trials utilizing the Products and all information
pertaining to manufacturing and regulatory approvals as exists or becomes available during this
Agreement. Data also means that descriptive and manufacturing information that is required for use
in regulatory submissions.




Schedule A





 









 











Schedule B
— Products and Specifications



Schedule B of this Agreement comprises a Bill of Materials that defines a composition of the
Product that is intended for use in clinical trials in the US. The Parties recognize that laws,
regulations, customs and/or practices in various countries may dictate or otherwise require that
the labeling and/or other aspects of the composition of Product for clinical trial use or
commercial sale differ from that specified in Schedule B. Therefore, from time to time CytoCore may
request and QuantRx may agree to produce a version of the Product that conforms to the laws and
regulations of a particular country or market. Each such version shall be defined by a Bill of
Materials and shall be assigned a unique identification. Each such Bill of Materials agreed upon in
writing by the Parties shall be incorporated by reference into Schedule B of this Agreement.




Initial Specifications:




          1.
Outer carton (SKU), having the outside dimensions of: 5.5x7x2.5 inches




          2.
Tyvek envelop, self sealing, having the outside dimensions of: 9x6 inches




          3.
Sarstadt five (5) part biological mailing vial




          4. 19ml CytoLyt® per kit, dispensed into (3) vial




          5. Miniforms, untreated (2)




          6. Vinyl glove (1)




          7. Clinical study label for envelop (1) and SKU




          8. Single color Product Insert for Clinical (trial) use





NOTE: the above applies to Product for use in clinical trials and will be revised to reflect
the configuration of the commercial product upon receipt of
regulatory clearance.




NOTE: Multiple versions of the Product, each with a unique SKU, will be required. A separate
Bill of Materials (Specification) will be prepared for each version. These versions will differ
in terms of labeling and package inserts based upon the laws and regulations of the intended
destination country; whether the Product is intended for use in a clinical trial; or whether the
product is intended for use as a professional sample.



Schedule B




 









 








Schedule C



Purchase Prices: CytoCore will purchase each “PadKit®” at QuantRx’s direct cost plus a 35%
markup.



Price for each PadKit in CY2008 shall be US$5.00 each. To be revised based upon year 1 order
quantity




Schedule D